The revelation Wednesday night that President Donald Trump "reimbursed" his longtime lawyer, Michael Cohen, for a $130,000 payment to the adult-film actress Stormy Daniels shortly before the 2016 election could significantly strengthen the criminal case against both men, campaign finance experts say.
Cohen is already under scrutiny for the payment, which legal experts say could be a violation of the federal limit on individual political contributions.
Meanwhile, if Cohen paid Daniels to help Trump's chances in the election, and if Trump knew about it, he could face criminal exposure for failing to properly disclose the payment and his reimbursement to Cohen.
President Donald Trump's personal defense lawyer threw a wrench into his client's argument by admitting on national television that Trump was aware of, and reimbursed, his longtime lawyer Michael Cohen for a $130,000 payment Cohen made to the adult-film actress Stephanie Clifford shortly before the 2016 US election.
Clifford, who is known as Stormy Daniels, alleged earlier this year that she had an affair with Trump in the mid-2000s, while he was married to First Lady Melania Trump. She is now suing Cohen in a California civil case to get out of a nondisclosure agreement she signed in October 2016, claiming that the document is null and void because Trump never signed it.
Rudolph Giuliani, the former New York mayor who is now representing Trump in the Russia investigation, told Fox News' Sean Hannity on Wednesday night that Trump "reimbursed" Cohen for the payment to Clifford "over a period of several months."
He added that the payments were "perfectly legal."
More on Michael Cohen:
Campaign finance experts and former federal prosecutors disagree.
Giuliani's statement "puts Trump on the hook for criminal violation of campaign finance laws," wrote Paul Seamus Ryan, the vice president of litigation and policy for Common Cause. "Violation is only criminal if [it was] knowing and willful. Trump reimbursement=Trump knowledge," Ryan said.
The legal risk Trump faces differs based on his motive behind the payment. If Cohen made the payment in order to help Trump hide the affair from his wife, it would not open him up to criminal exposure.
If, however, Cohen made the payment, with Trump's knowledge, to hide Trump's affair from the electorate leading up to the November 2016 election, it would count as an in-kind political contribution. The federal limit on such contributions is $2,700.
Trump, in turn, could face legal jeopardy for failing to properly disclose the donation and its reimbursement as per campaign finance regulations, according to election-law expert Rick Hasen.
Ryan added that Trump could be in additional violation of a federal criminal statute that prohibits making materially false statements to the federal government.
"Giuliani just made the DOJ's case against Trump and Cohen a whole lot stronger," he said.
But experts also pointed out that it will be important to establish whether Cohen was reimbursed by Trump personally or by the campaign.
"If Trump himself paid Cohen back, he could make the argument that he was doing it to hide the affair from Melania," said Jeffrey Cramer, a longtime former federal prosecutor who spent 12 years at the DOJ.
He added: "That wouldn't constitute a political contribution and it gives Trump some cover, because the fact that he's had affairs is hardly a revelation and it's certainly not criminal."
Giuliani clarified his comments to The New York Times later Wednesday night, describing the payment arrangement between Trump and Cohen:
"Some time after the campaign is over, they set up a reimbursement, $35,000 a month, out of his personal family account," Giuliani told The Times, adding that, overall, Cohen had been paid as much as $470,000 from Trump through that arrangement, which included reimbursement for "incidental expenses" incurred on behalf of Trump.
When news of the Daniels payment first surfaced, Cohen said he borrowed against his home-equity line and "transferred" the funds "internally to my LLC account in the same bank."
"People are mistaking this for a thing about the campaign," he told Vanity Fair earlier this year. "What I did defensively for my personal client, and my friend, is what attorneys do for their high-profile clients. I would have done it in 2006. I would have done it in 2011. I truly care about him and the family — more than just as an employee and an attorney."
Trump maintained that he had no knowledge of the payment and was not involved. When asked by reporters on Air Force One last month where Cohen had gotten the money, Trump replied: "I don't know."
He later said during an interview on "Fox & Friends" that Cohen "represented me" with respect to the Daniels case.
Following Giuliani's revelation Wednesday night, The Washington Post reported that Giuliani had made the disclosure with Trump's full advance knowledge and approval.
Both Trump and Cohen are currently under criminal investigation. Cohen is being investigated by the Manhattan US attorney's office for possible campaign finance violations, bank fraud, and wire fraud. Trump, meanwhile, is being investigated by the special counsel Robert Mueller for possible obstruction of justice. Mueller is also looking into whether members of the Trump campaign colluded with Moscow to tilt the 2016 race in his favor.